On November 14, 2012, just days after his re-election and two weeks after Hurricane Sandy flooded New York City, President Obama was asked by the New York Times about climate policy, specifically the possibility of a carbon tax:

I think the American people right now have been so focused, and will continue to be focused on our economy and jobs and growth, that if the message is somehow we're going to ignore jobs and growth simply to address climate change, I don't think anybody is going to go for that. I won't go for that.

This short statement reveals the raw political calculus that prevents the Obama Administration--and really, most every national and international political body--from meaningfully addressing the climate crisis. Obama's comments reflect the underlying assumptions of politicians on both sides of the aisle (at least those who recognize that there is a climate problem) and conventional thinking across virtually all sectors of society.

The benefits of--and need for--economic growth are so widely assumed that they are hardly ever debated. And yet, maintaining perpetual growth on a finite planet is impossible--logically, physically, and yes, economically. Nevertheless, our Western way of life seems to depend on a shared belief in economic growth. And so most politicians, economists, businesspeople, and ordinary citizens continue to prop up this irrational view.

In our view, President Obama's widely shared judgment that addressing the climate crisis is secondary to getting "back to normal" is wrongheaded--not only because it implicitly underestimates the severity of the climate crisis, but also because it presupposes that the old economic "normal" can be revived. In fact, the "normal" of robust economic growth is gone and won't return, at least in the long term (as we'll show in this paper). But without recognition of that fact, and without a viable alternative to the growth paradigm, significant progress in climate policy is highly unlikely. And without climate policy, we are headed toward global catastrophe.

The environmental community recognizes that truly meaningful national and international climate policy solutions are currently politically infeasible. But the source of the intransigence is often attributed to political partisanship and the corruptive influence of moneyed interests--most notably the fossil fuel industry, which has used lobbying, campaign contributions, massive advertising, and similar tactics to shift public perceptions and exert political influence.

Therefore, the strategies employed by many in the organized climate movement (particularly after painful failures in 2009 and 2010, at COP15 in Copenhagen and the US Senate) have centered on pursuing state and regional policies, and on growing a citizen movement to stand in vocal, active opposition to the fossil fuel industry. On both these fronts the environmental community has accomplished a lot.

But the growth imperative is the underlying cause of the climate crisis. As long as the climate movement leaves it unchallenged, meaningful climate policy won't come until it's too late, if at all. If we (politicians, businesspeople, environmentalists, and ordinary citizens alike) continue to prioritize growth above all else, we will refuse to do what is required to address the climate crisis--which is to cut fossil fuel use dramatically. To put it plainly, we're hooked on economic growth and economic growth is hooked on cheap fossil fuels.

Cheap fossil fuels--particularly oil--grease the wheels of our globalized, consumerism-based economy. Of course, we must correctly price fossil fuels (internalizing their environmental costs instead of externalizing to other sectors of the economy and future generations), and we must concurrently commit to a massive build-out of renewable energy production and embrace energy efficiency. But it is difficult to imagine accomplishing this without a reduction in that pillar of conventional economic thinking--Gross Domestic Product (GDP)--in at least the OECD nations.

The good and bad news is that the growth paradigm is already in its death throes thanks to fundamental changes occurring in the very systems (energy, climate, and economy) that have supported it for the last century. The transition to a new paradigm will be challenging, but the sooner we act the better chance we have of managing it. Thankfully, models are already emerging for making our communities healthy, vibrant, and resilient without the need for perpetual economic growth.

In this paper we argue why the changes taking place in our energy, climate, and economic systems constitute a new (post-growth) "normal" and why a different kind of growth is absolutely critical to addressing the climate crisis: the growth of smallscale, local efforts aimed at responding to these changes by building community resilience.

The New Normals

We have entered an era of "new normals" not only in our economy, but in our energy and climate systems, as well. The implications are profound:

The New Energy Normal. The era of cheap and easy fossil fuels is over, leading the industry to resort to extreme fossil fuel resources (tar sands, mountaintop removal coal mining, shale gas, tight oil, and deepwater oil) to meet demand. Unfortunately, these resources come with enormous environmental and economic costs, and in most instances provide far less net energy to the rest of society. They also require much higher prices to make production worthwhile, creating a drag effect on the economy. As a result, high energy prices and economic contraction are likely to continue a back-and-forth dance in the coming years.

The New Climate Normal. Climate stability is now a thing of the past. As extreme weather events grow in severity, communities are increasingly adopting strategies that build resilience against the effect of these and other climate shocks. At the same time, we must take dramatic steps if we hope to avoid raising global temperatures more than 2 degrees C above pre-industrial levels. According to Kevin Anderson of the Tyndall Centre, this would require a 10% reduction in CO2 emissions per year, starting now -- a rate so significant that it can only be achieved through dramatic reductions in energy use.

The New Economic Normal. We've reached the end of economic growth as we've known it in the US. Despite unprecedented interventions on the part of central banks and governments, the so-called economic recovery in the US and Europe has been anemic and has failed to benefit the majority of citizens. The debate between stimulus and austerity is a distraction, as neither can fully address the factors that spell the end of economic growth the end of the age of cheap oil, the vast mountains of debt that we have incurred, the diminishing economic impacts of new technologies, and the snowballing costs of climate change impacts.

These fundamental changes in our energy, climate, and economic systems require unprecedented (and previously politically untenable) strategies. Yet this new reality is still largely unrecognized. As long as our leaders' predominant focus remains on getting back to the days of robust economic growth, no national or international climate policies will be enacted to do what is required: cut fossil fuel use dramatically.

Instead of focusing on achieving climate policy within the economic growth paradigm, the US environmental community must embrace strategies that are appropriate to these "new normals."

Responding to each of these new energy, climate, and economic "normals" will require one common strategy: building community resilience. Efforts that build community resilience enhance our ability to navigate the energy, climate, and economic crises of the 21st century. Done right, they can also serve as the foundation of a whole new economy -- an economy comprised of people and communities that thrive within the real limits of our beautiful but finite planet.

Thankfully, innovations that build community resilience are cropping up everywhere, and in many forms: community-owned, distributed, renewable energy production; sustainable local food systems; new cooperative business models; sharing economies, re-skilling, and more. While relatively small and inherently local, these projects are spreading rapidly and creating tangible impacts.

Growing the community resilience movement to the national and global scale that s needed will require the full support and participation of the US environmental community. Specifically we need to:

build the capacity of groups -- large and small -- who are leading these efforts;

support the growth of a global learning network; and

enable local investments to flow into community resilience enterprises.

By making community resilience a top priority, environmentalists can offer an alternative to the "growth at all costs" story, one in which taking control of our basic needs locally has multiple benefits. Community resiliencebuilding can create new enterprises and meaningful work, and increase well-being even as GDP inevitably falters.

It can reduce greenhouse gas emissions and dependence on fossil fuels, while addressing social and economic inequities. And it can strengthen the social cohesion necessary to withstand periods of crisis.

On their own, community resilience projects can't overcome all the environmental, energy, economic, and social equity challenges facing us. That will require coordinated global, national, regional, community, business, neighborhood, household and individual efforts. But the community resilience movement can help create the conditions in which what is now "politically impossible becomes politically inevitable."

How the environmental community responds to the risks and opportunities of the new energy, climate, and economic "normals" will make an enormous difference in its success, and in the fate of humankind.

December 23, 2012

No question, avoiding serious temperature increases from greenhouse gas emissions is one of the most difficult tasks facing humanity today, likely the most difficult it has ever faced. While the UN, the International Energy Agency, the World Bank and scientists all over the world are predicting doom if major actions are not taken before 2020, the earliest the governments, on their presently-planned time framework, will have implemented anything at all. There is ZERO evidence of progress towards dealing with the problem in the public sector or the energy industry. Greenhouse gas emissions are going up at a rate that is faster every year, when they should have been going down for decades. The Economist reports (December 1, 2012) that international climate negotiations are a "Theatre of the Absurd," and "Climate policy is going nowhere fast." An enormous amount of progress needs to be made by 2020, a difficult task indeed, but if the citizens of the planet stop waiting for the public sector, perhaps ridiculously simple, too. When it is boiled down to the basics, all you need to know is a tautology: the way to reduce emissions is to reduce emissiions.

It is an immense relief that the urgency is now understood broadly, in business circles as well as among those they might have passed off a few years ago as "environmental extremists." As with any addiction, the first step in curing the addiction to fossil fuels is recognizing the addiction. That has been a long time coming, and as a consequence, the problem has been enormously exacerbated. We are faced now with too many people using too much stuff, and almost no time to change, but there is finally a consensus, except among our moribund governments, that action NOW is essential.

But what to do? The way to reduce emissions is to reduce emissions. But then people start putting on conditions that take over, like, "We can’t reduce emissions if that will reduce total energy use," or "We can’t reduce emissions if that will slow "economic growth." Demands that were reasonable in other times may be literally impossible to fulfill now. Unrealistic optimism about growth of the economy as a guideline for what steps are or are not feasible is the hardest of all illusions to escape.

We have all had the giddying experience of the post-World-War-II climb: we have come close to unraveling the ultimate secrets of the universe, we have literally reached for the stars, we accomplished a miraculous Green Revolution, we produced this marvel, the Internet, we have made intercontinental air travel commonplace, we invented antibiotics, we ended forever the scourge of smallpox, we invented the computer and it took over the world. But that half century was two million years coming, and with unprecedented costs: the exhaustion of fossil fuels, the destruction of the world's great forests, the mining of all but a small fraction of phosphorus and potassium, two of the handful of elements essential to all life, the draining of the earth's great underground water supplies, the development and rapid degradation of virtually every farmable acre on earth - the list goes on, You’ve heard it before. My personal summary of the situation in first, "The Imminent Crash Of the Oil Supply. . .," which Market Oracle was kind enough to post on its site as the "financial analysis of the week" two years ago (and which for reasons I do not have room to discuss except a little below, is unaffected by illusions that the United States is "awash in oil" and about to become "Saudi America"); and second, "Peak Food: Can Another Green Revolution Save Us?" . In short, and as the latest post on Market Watch by Brent Arends points out, "The End of the World and How to Profit from it," the halcyon days of 3% and greater world annual GDP growth are almost certainly over, So we can no longer solve any problem by throwing enough money and technology at it, assuming that whatever the cost, we could pay now, borrow if necessary, and today’s bank-breaker would be tomorrow’s pocket change.

This includes the global warming problem. The way to reduce emissions is to reduce emissions, regardless of the formal means we use - a carbon tax, "cap and trade," traditional regulation, voluntary conservation, etc. There are essentially two devices for reducing emissions: (1) technofixes like increased engine efficiency and "sustainable energy sources" (you know, hybrid engines, solar power and so forth), with total consumption unchallenged in the interim, and (2) simple reduction of consumption (driving less, turning down the thermostat, having fewer babies and toys, etc.) The first route can be followed without built-in reduction of energy-industry profits, The second likely cannot. If reduction of energy industry profits is "off the table" for government negotiators, then they can easily find themselves in a "theatre of the absurd."

The first route is neither economical nor fast, so we had better rethink whether it can be a "nonnegotiable demand." You need to invent the technofix, then you need to manufacture it, then you need to replace the old with the new. Invest in latter-day Edisons. Invest in factories. Invest in retooling. Either the government pays or the public pays. Good things, but money and credit and keeping particular segments of the economy happy, have their limits, as we are discovering after the wild ride of debt accumulation since 1980. Picture scrapping all the cars on the road and replacing them with ones that use one quarter the fuel, if that is possible. Maybe 150 million cars at $20k each. $3trillion, yes? Not necessarily a U.S. job-creator either, given out-sourcing. Picture scrapping 100 million CO2-generating home furnaces plus the means for delivery of the fuel, and replacing them with electric heaters run on carbon-free electricity. Who is going to design the heaters? Who is going to pay for them? Maybe $2k each. And where are the three terawatts, in round numbers, of sustainable electricity we need to replace fossil-generated power? Solar and wind? No; at present they are too intermittent and only a fraction of grid energy can be replaced with them. We need to invent and produce and install economical storage devices for sustainable energy, thus far a hopeless task. Not to mention maybe $30k per household times 100 million households. $3trillion? Nuclear? Either too unsafe or too costly, probably both. And you’d better believe, not in MY back yard. Fusion? The primary concept is to pack hydrogen in a steel chamber at a temperature and pressure comparable to the center of the sun without any leaking out and melting the chamber, so you can duplicate the process in the sun of turning hydrogen into helium. The fusion scientists would grumble about this explanation but would have to admit that it’s right. They’ve been trying to do this for half a century and will probably figure out in another half century that it’s a really klutzy way to get simple solar energy.

And the cost of the three terawatts assuming we could design something that would work? Depending on what you’re building, maybe $5 per watt, $15 trillion for three terawatts of something we haven’t invented yet. Hmmm. That’s a trick. Guaranteed it won’t happen before 2020. Then there’s the retooling of all the factories and public buildings, construction of thousands of miles of public transit . . . I guess we’re talking $20-40 trillion, simply to permit us to go along as we have without limiting growth, all to be spent or borrowed NOW. Talk about a fiscal cliff. Try selling the idea in Washington or Europe right now. It’s pretty to many folks to dream of the economy growing at breakneck speed and $40 trillion being invested in the private economy NOW. But it’s not going to happen. The magic word now is "austerity."

So look at the second route. "Austerity" at the personal level? Close, but more a change of priorities, although radical. Some initial thoughts about what to do:

Stop eating beef, which costs roughly thirteen times more greenhouse emissions than chicken, 57 times as much as potatoes. Anyone can cut out beef right now and get spending money in the process. That’s a surprisingly large fraction of our ghg emissions (worldwide more than the entire transportation sector), often more than from our car. If all Americans were to give up beef, they would arguably accomplish more than all the government global warming programs to date.

Splurge in some new woolens and turn the thermostat down to 50 degrees. Here in chilly Massachusetts that will reduce your heating fuel consumption by over half. 100% in warmer places. Not everyone’s piece of cake, but it puts a lot of money in your pocket. Look what only 0.8 degrees C of warming has done to the world, and if we don’t do these things we’re talking 4 degrees or more. The critters out there have it right: Good coats to keep their bodies warm and the rest of the world cool.

Anyhow, this is just practice for what Mama Nature will force on us shortly as the fossil fuels disappear.

And they will. Thought all that had changed with shale oil? Not yet and probably not ever. With all the brouhaha, they are only turning out 800,000 barrels per day, 1% of world demand, and they’re losing money because it costs too much to get it out of the ground. The people who are saying it will be a "go" are basing that on the GDP growing at 3.5%/year so we can pay double and be happy without pain. Also, they aren’t taking into account that shale oil wells run dry much faster than conventional ones. There are no solid figures as to the actually retrievable shale oil, with estimates ranging, astonishingly, from 4.3 billion barrels (the pittance currently estimated by the United States Geological Survey) to six trillion barrels in the view of some industry people. The "Saudi America" idea seems to come from a grim reality - that by 2020, Saudi Arabia’s oil production may be down to what shale oil production may be up to, with no net gain. And then there is reality: American demand for and consumption of petroleum is dropping at 4.5% per year according to Polczer, "America’s Missing Barrels", Petroleum Economist, April 24, 2012. This is precisely the rate predicted in "Imminent Crash," above; it is masked by our economic morass and by our large-scale use of alcohol as a gasoline additive. So it is at least premature to conclude that "peak oil" is no more.

And by the way, if we are becoming "Saudi America," we are setting ourselves up to be the ultimate climate terminators - if there is a substantial amount of shale oil or tar sands oil that can be gotten out of the ground economically, it has to stay there anyhow. So regardless of what’s there, we’ve got to cut our emissions NOW. The way to cut emissions is to cut emissions.

And then there are the cars, which cost us something like $8,000 each to run annually, a trillion dollars per year, give or take, nationally. If we’re thinking "austerity" is going to be forced upon us, that’s certainly a good place to start. Our grandfathers or great-grandfathers didn’t have cars at all and neither did the folks who settled the continent. Take the backed-up commuter traffic. Thousands of cars, all going in the same direction, and because they are barely moving, unlike the commuter train that goes sailing by, there’s time to take a look. Most likely there’s not one in sight without four empty seats. So everyone should be able to find a less wasteful vehicle. And apparently close to four out of five clogging the road could be carpooling. It’s only a matter of computer-aided logistics. There are carpool lanes in many cities, you know, and they don’t jam up. And if you’re not commuting, then stay home except for necessities. Is there any earthly reason not to carpool with your neighbors for groceries? There. That should be good for at least a 50% cut in your gas bill. And if you’re a businessman, you should be able to invent a system for making carpooling simpler, and market it. Because everyone will be saving in a big way on their gas bills and their carbon counts. A little difficult, but not impossible; failing to do it only postpones the inevitable a few years. And how about giving out public transit passes as alternatives to coupons? I don’t know, but the twentieth century wasn’t the only century.

And if you stop buying "stuff" that is unnecessary or comes from unnecessarily far away, that’s another big cut. Buy local, employing what’s left of the workforce not already overseas. Your "i-phone" (what do the damn things do, anyhow?), if it’s got the Apple or Microsoft or HP or Samsung brand name on it, should have the Fox.conn brand name, because that’s the company that makes ‘em all. They’ll come from Fox.conn to the US on massive diesel freighters that are completely unregulatable as to how much they pollute the atmosphere while they’re on the high seas. So the less you buy from China (or anywhere in East Asia) the less diesel fuel you’re responsible for. The same is true, of course, if you live in the Northeast and buy vegetables and fruits from California and Florida.

Dunno, but that’s a recipe for cutting personal American carbon emissions by half, RIGHT NOW, and if we don’t do it now, Mama Nature will do it for us in about 25 years and the cost of 25 years of indulgence will be thousands, likely millions of years of a devastated planet. We’ve been waiting decades for someone else to tell us what to do, and they never have. This is real; I’ll give links discussing every fact in this harangue to anyone who asks: narguimbau@earthlink.net.

Does it seem fanciful that we would reduce our carbon emissions by half overnite through conservation? Not really; ours are twice Europe’s, and they are hardly hurting. That will do for this week. Does it seem fanciful that we could settle the North American continent without a drop of oil? Of course, but we did it. Does it seem fanciful that we could destroy 90% of the earth’s species, perhaps including ourselves and leave the planet devastated without making a serious effort to avoid it? Yes, but we are about to do that also. So if we are going to do something in the near future that now appears fanciful, let it be positive.

We’ll all have to muddle through with some help from our friends. We can start by finding out our carbon footprint and how it compares to those of our neighbors and countrymen. Try a footprint calculator, which should include a pretty comprehensive and detailed coverage of your activities, because everything we do costs carbon. Carbon heating the earth and creating Katrinas and Sandys and massive drought and destroying the polar icecaps and acidifying the oceans, and it’s hardly begun.

Here’s a carbon footprint calculator: Carbon Footprint. I don’t know that it’s the best, but it’s a start. (It will also invite you to buy "offsets" so you won’t have to feel guilty - that’s where we part company.) It will tell you what you can do and hopefully convince you that you can and should reduce your fingerprint to 80% below America’s current norm. If everyone does that, the global warming problem is at least not going to get worse. Humankind can’t figure that out and see it’s better than destroying 90+ % of the world’s species and leaving our grandchildren a barren desert? We all need to know our carbon footprints and start cutting. Hopefully people in business and government will work not only to do it for themselves, but to make it easier for others. Of course no one gets to wait for that, which to date hasn’t happened. The problem to date with global warming is that everyone has been waiting for someone else to act. I mean everyone - the governments, the oil industry, small businesses, conservation organizations, consumers. NO MORE!

Let’s be clear about this idea that investing in conservation is MUCH cheaper than investing in new energy sources, with an example. In VERY round numbers, and it doesn’t matter too much how it works, the capital cost of a power plant is around $5 per watt of production capacity, generally not less than $3 nor more than $10, and then there’s the fuel, or if the power plant is truly sustainable, there is something else like sunshine. The cost of compact fluorescents is about $.06 per watt saved, or if you only light them 4 hours per day, then $0.36 per watt saved, and there isn’t any fuel. Less than ONE TENTH the initial cost and no fuel?. And how many really wonderful woolen sweaters could you splurge on every year with the savings from turning down the thermostat? There’s just no comparison in the costs. Investing in energy conservation is MUCH more cost-effective than investing in energy consumption. The fundamental idea behind "alternative energy" is to cut carbon emissions only when the alternative shows up on the scene, so your energy use never decreases.The idea of cutting consumption hasn’t been popular because everyone has been hung up on increasing or at least maintaining consumption. That’s called "economic growth." We can’t be afraid of threatening "growth" if ultimately it is growth of carbon emissions that threaten life itself. The time for buying or borrowing our way out of problems is behind us, or, if under some fantastical circumstance it’s also ahead of us, then there’s no time to wait.

There’s an element of "feel good but don’t make a difference" in this unless we’re all careful. It comes back to the footprint calculator. Everyone needs to recalculate their footprint with an eye to reducing it SOON by 80%, and at least say 10%/year without fail. Businesses can help with accurate and complete carbon costs marked on everything they sell. This is a war. We all worked together to cut energy consumption in World War II, so we can all do it now.

The point of all this is that we ALL have responsibility for global warming, and, if everyone keeps pointing the finger at everyone else, we are doomed. It just happens that the only ones who can do enough, quickly and economically enough, are the consumers; even if that weren’t true, everyone else - government, industry, even the traditional "conservationists," have dropped the ball, leaving the consumers left to play. Everyone else, if there is anyone else, has to help them in the onerous task. NOW. Technofixes - alternative energy, efficient engines, things that let us go on doing what we did before but with less carbon - will help, but we have to come up with money to buy them before they’ll help. Standing alone they will be too little, too late, and VERY expensive. We CANNOT go on doing what we did before if the planet is to survive.

The governments may begin to act, now that unprecedented pressure is on them, but even if they do, the technofixes approach alone or arguments about whether we can afford it, are all too likely to prevail until it is too late. And there is out there among the earth’s 7 billion or the United States’ 300 million, a Gandhi - a person of vast energy, vast integrity, vast compassion, vast intelligence, who could come forth as a leader to help us along. That would be a plus.

But we cannot wait for the Second Coming while the Four Horsemen are about. So let’s get on with the show.

Nicholas C. Arguimbau is a semi-retired semi-tired lawyer with licenses to practice before the California Supreme Court and the United States Supreme Court. He takes pictures and writes, and gets his dogs out to sniff the mushrooms, but less than is good for them or him.

From Plymouth Rock to Thanksgiving at Best Buy: The Puritan ethic went spectacularly astray, all for an iPad mini

For wily veterans of a decade of Black Friday doorbuster sales, 2012 was the year that the last semblance of a boundary between the actual day of Thanksgiving and the formal commencement of the holiday shopping season finally collapsed. It wasn’t just the decision by some of the biggest retailers to move their opening hours earlier than ever before. For many customers, the exact time when the doors were unlocked was irrelevant, because Thanksgiving had already become completely subsumed in shopping mania. What difference does it make if the doors open at 8 p.m. or midnight, if you were already in line days earlier?

Consider the example of the Kelley family in Fort Myers, Fla., so determined to sacrifice nothing of their quality of life while in quest for the perfect deal that they showed up in front of the local Best Buy’s doors on Monday, equipped with a dinner table.

This is what we call not messing around:

“[Over the years] we’ve pretty much gone from not sleeping in a tent to a tent and slowly progressed to where we’ve got everything that we remember we need,” said Sean Kelley, who is ready to have his Thanksgiving feast in line, [as reported by WSVN.com in Miami/Fort Lauderdale.] “On Thanksgiving, mom comes out with the china and the plates, and we’ve got everything you have on a normal Thanksgiving table.”

That’s some real can-do American pioneer spirit right there, worthy of the Puritan settlers who struggled through fierce New England winters to bequeath us our most indigenous of holidays. The merger of festival and fantastic flat-screen TV deal makes sense: The United States is the greatest consumer society that has ever existed on this planet. Shopping is the lifeblood of our economy; capitalism as we know it would founder if we all stopped buying stuff. In this context, “buying nothing” on the very day that the Christmas shopping season traditionally begins would be foundationally unpatriotic. And if that means passing the gravy while standing in line in front of Wal-Mart, so be it.

But there was also something deeply disturbing at the sight of so many Americans waiting this week to get into stores that were already open. Black Friday’s metastasizing control over our popular culture is propelled by a poor economy and reminds us how millions of Americans have seen their incomes stagnate or fall over the past decade. We wouldn’t be so desperate to be first through those doors if stretching every dollar to its furthest possible extent didn’t mean so much, right? And union activists attempting to organize Wal-Mart workers wouldn’t have targeted Black Friday for a nationwide strike if the day wasn’t so resonant for the national economy, right?

Black Friday has it all: Exploited workers! No Thanksgiving holiday for you, Wal-Mart stock boy, to go along with your rock-bottom wages and nonexistent healthcare! Consumer product superabundance! Just deciding which of the proliferating tablet offerings to buy this year is a task that will intimidate even the savviest shopper. Violence and greed! Even as you are reading these words, someone, somewhere, got a little too frisky with the pepper spray while reaching for that half-off Sony Bravia.

It’s a toxic mix that tells us too much about the state of our own culture. The kickoff to the shopping season is crucial to the overall health of our economy, but at the same time the annual spectacle is sending strong signals that something is deeply wrong. Since when did celebrating Thanksgiving while in line to buy an iPad Mini represent the apotheosis of our culture?

- – - – - – - – - -

Every time Black Friday rolls around, I always wonder how the German sociologist Max Weber, author of “The Protestant Ethic and the Spirit of Capitalism,” would have explained what’s been happening outside our biggest big box stores over the past few hours. Because buried deep down beneath the jumble of tents and maddening crowds are things he might have recognized as crucial to the evolution of capitalism, profit-inculcating values like thrift and frugality and self-denial. Perhaps Weber got a little too enthusiastic about the supposed correlation between Protestantism and capitalism-friendly habits, but he didn’t get it all wrong. Black Friday strikes chords that many Puritans would thrill to: It rewards sacrifice and discipline.

The very name Best Buy is an obvious shout-out to Calvinist frugality. What could be more true to America’s deepest cultural roots? The Wal-Marts and Targets and Macy’s can compete on price, but they don’t have a chance at that level of semiotic purity. In its bland profundity, the title “Best Buy” is more American than baseball or apple pie. It’s both a comforting promise, and a call to arms. In a country where 70 percent of the economy is accounted for by consumer activity, the notion of the “Best Buy” is the ultimate in potency. It’s the Platonic good, except that you can actually touch it.

Surely Weber would also have appreciated how the urge to profit forces a constant froth of innovative thinking, itself the wellspring of capitalist progress. Take the “doorbuster,” for example. Limiting your best deals to the first handful of people through the door has proven so effective a motivator that some of the biggest chain stores now have multiple doorbuster events throughout the entire weekend, opening and shutting their gates like automatic garage doors with terminal cases of the hiccups.

An Early Thursday Doorbuster begins at 6 a.m. Thanksgiving Day and runs until 4 p.m. Stores will reopen at 8 p.m. on Thursday and close at 3 a.m. early Friday morning, marking the beginning of the Late Thursday Doorbuster deals. Stores open again two hours later, at 5 a.m. Friday morning, and run until 11 a.m. for Friday Doorbuster deals, which are effective through Saturday.

Get in line. The doors open. Grab the best deals. The doors close. Get back in line again! New deals! It’s a perpetual motion machine. It’s the very perfection of retail capitalism, simultaneously imprisoning and liberating consumers in a revolving door of alternating denial and satisfaction.

The sound of that revolving door is the sound of the throttling engine of a mighty world economy. Sure, it’s scary when those doors first crack open, and that tide of human flesh grabs at everything in sight. But it’s also kind of awesome. The sterile alienation of Cyber Monday can’t compare to the gladiatorial thrill of real human contact.

But the weirdest thing about Black Friday, the part that Weber might have had the hardest time explaining, is how fine the line is between thrift and greed. Consider the case of 19-year-old Ashley Wagner, who started camping outside a Best Buy in Saginaw Township on Monday morning. No china on the dinner table for Wagner, who took a week off from her job at Taco Bell to make sure she didn’t repeat last year’s disaster, when she was second in line.

With a generator, a can of Pringles and some Little Debbie snack cakes, Wagner said she’s ready for the week ahead. On Thanksgiving Day, Wagner’s mom will deliver a hot meal from the Turkey Roost restaurant in Kawkawlin.

“Being first in line ensures me I will get what I want,” said Wagner. Her door-busting dream: a camera for her mother, a laptop for her brother, and a flat-screen TV and some Dr. Dre headphones for herself.

I’m sure I wouldn’t mind a pair of Dr. Dre headphones under my own Christmas tree, but I don’t think taking a week off from your job to stand in line to nab a deal on some stylin’ audio equipment is an example of either thrift or frugality. Let’s not even get into the data that suggest that Black Friday’s prices aren’t invariably the lowest available, that the whole thing is just one magnificent con job. Whether or not Wagner gets what she wants, there’s no escaping the grim reality of that can of Pringles and Turkey Roost hot meal.

It’s convenient to criticize the retailers for their encroachment on turkey time and their shameless stoking of greed and bad mob behavior. But the Best Buys of the world wouldn’t be swinging their gates wide open if customers didn’t keep clamoring to get in. We’re locked in a mutual embrace and neither side is willing to let go.

Next year, look for Best Buy to begin delivering turkey dinners directly to the waiting shoppers. Indeed, I’m surprised it hasn’t already seen the market opportunity. Who needs a mom to bring over the mashed potatoes, when the market is more than ready to provide?

November 22, 2012

A half century ago America’s largest private-sector employer was General Motors, whose full-time workers earned an average hourly wage of around $50, in today’s dollars, including health and pension benefits.

Today, America’s largest employer is Walmart, whose average employee earns $8.81 an hour. A third of Walmart’s employees work less than 28 hours per week and don’t qualify for benefits.

There are many reasons for the difference – including globalization and technological changes that have shrunk employment in American manufacturing while enlarging it in sectors involving personal services, such as retail.

But one reason, closely related to this seismic shift, is the decline of labor unions in the United States. In the 1950s, over a third of private-sector workers belonged to a union. Today fewer than 7 percent do. As a result, the typical American worker no longer has the bargaining clout to get a sizeable share of corporate profits.

At the peak of its power and influence in the 1950s, the United Auto Workers could claim a significant portion of GM’s earnings for its members.

Walmart’s employees, by contrast, have no union to represent them. So they’ve had no means of getting much of the corporation’s earnings.

Walmart earned $16 billion last year (it just reported a 9 percent increase in earnings in the third quarter of 2012, to $3.6 billion), the lion’s share of which went instead to Walmart’s shareholders — including the family of its founder, Sam Walton, who earned on their Walmart stock more than the combined earnings of the bottom 40 percent of American workers.

Is this about to change? Despite decades of failed unionization attempts, Walmart workers are planning to strike or conduct some other form of protest outside at least 1,000 locations across the United States this Friday – so-called “Black Friday,” the biggest shopping day in America when the Christmas holiday buying season begins.

At the very least, the action gives Walmart employees a chance to air their grievances in public – not only lousy wages (as low at $8 an hour) but also unsafe and unsanitary working conditions, excessive hours, and sexual harassment. The result is bad publicity for the company exactly when it wants the public to think of it as Santa Claus. And the threatened strike, the first in 50 years, is gaining steam.

The company is fighting back. It has filed a complaint with the National Labor Relations Board to preemptively ban the Black Friday strikes. The complaint alleges that the pickets are illegal “representational” picketing designed to win recognition for the United Food & Commercial Workers (UFCW) union. Walmart’s workers say they’re protesting unfair labor practices rather than acting on behalf of the UFCW. If a court sides with Walmart, it could possibly issue an injunction blocking Black Friday’s pickets.

What happens at Walmart will have consequences extending far beyond the company. Other big box retailers are watching carefully. Walmart is their major competitor. Its pay scale and working conditions set the standard.

More broadly, the widening inequality reflected in the gap between the pay of Walmart workers and the returns to Walmart investors, including the Walton fammily, haunts the American economy.

Consumer spending is 70 percent of economic activity, but consumers are also workers. And as income and wealth continue to concentrate at the top, and the median wage continues to drop – it’s now 8 percent lower than it was in 2000 – a growing portion of the American workforce lacks the purchasing power to get the economy back to speed. Without a vibrant and growing middle class, Walmart itself won’t have the customers it needs.

Most new jobs in America are in personal services like retail, with low pay and bad hours. According to the Bureau of Labor and Statistics, the average full-time retail worker earns between $18,000 and $21,000 per year.

But if retail workers got a raise, would consumers have to pay higher prices to make up for it? A new study by the think tank Demos reports that raising the salary of all full-time workers at large retailers to $25,000 per year would lift more than 700,000 people out of poverty, at a cost of only a 1 percent price increase for customers.

And, in the end, retailers would benefit. According to the study, the cost of the wage increases to major retailers would be $20.8 billion — about one percent of the sector’s $2.17 trillion in total annual sales. But the study also estimates the increased purchasing power of lower-wage workers as a result of the pay raises would generate $4 billion to $5 billion in additional retail sales.

September 15, 2012

The following is an excerpt from the recently published America the Possible: Manifesto for a New Economy (New Haven: Yale University Press, 2012). The book, written as the third volume of Speth's award-winning American Crisis series, calls for deep, transformative change in a dozen areas of national life, including a reimagination of our political economy, a halt to debt-inducing consumerism, and a host of prescriptions for our bad case of affluenza. This appears with the kind permission of the author.

The path to a new political economy leads straight away from consumerism and commercialism to a very different world in which getting and spending, material possessions, and overall consumption have a decidedly circumscribed and modest place in everyday life.

In her insightful book, A Consumers’ Republic, Lizabeth Cohen documents that American consumerism as we know it did not just happen. It is not something in our genes or human nature, at least not wholly. Referring to the era of postwar prosperity that lasted approximately from 1945 to 1975, she notes that “this period of unprecedented affluence did much more than make Americans a people of plenty. Undergirding the pursuit of plenty was an infrastructure of policies and priorities, what I have dubbed, for shorthand, the Consumers’ Republic. In reconstructing the nation after World War II, leaders of business, government, and labor developed a political economy and a political culture that expected a dynamic mass consumption economy not only to deliver prosperity, but also to fulfill American society’s loftier aspirations.”

A consumer society is one in which consumerism and materialism are central aspects of the dominant culture, where goods and services are acquired not only to satisfy common needs but also to secure identity and meaning. Framing this situation as a matter of consumer sovereignty--where the customer is always right--is misleading. Consumption patterns are powerfully shaped by forces other than preformed individual preferences--forces such as advertising, cultural norms, social pressures, and psychological associations.

Consumerism is not, and should not be confused with, consumption that satisfies essential human needs. Consumerism is the faith that meaning, identity, and significance can be found in material, commodity consumption, which in turn requires money. But since meaning and self-realization cannot be found there, nor basic psychological needs so met, consumers remain unfilled and are driven ever on to seek more possessions, which requires still more money, all of which is well understood by marketers. Richard Layard refers to the “hedonic treadmill” to describe the phenomenon whereby people become habituated to their new incomes and their new toys. “When I get a new home or a new car, I am excited at first. But then I get used to it, and my mood tends to revert to where it was before. . . . Advertisers understand this and invite us to ‘feed our addiction’ with more and more spending. However, other experiences do not pale in the same way--the time we spend with our family and friends, and the quality and security of our job.”

A consumer society is one in which the human tendency to compare ourselves with others is grotesquely exploited. This human tendency to compare ourselves with others has not escaped the attention of humorists. There’s the joke about the Russian peasant whose neighbor had a cow while he did not. He had lived a good life, and so God asked how He could help. The peasant replied, “Kill the cow!” Numerous studies confirm that happiness levels depend inversely on one’s neighbor’s prosperity. People constantly compare themselves with others, and if everyone is better off financially, then no one is any happier. Comparative position is what counts, not absolute income, so rising incomes can leave just as many unhappy comparisons.

Consumerism thus has a doubly negative impact. It is the beating heart of the growth system. Private consumption expenditures in the United States, for example, are about 70 percent of gross domestic product, and consumer spending is the principal driver of the economy and its expansion. When the Financial Times observed that “the stamina of shoppers will be crucial for global growth,” the emphasis was on consumers serving the economy, not the other way around. Second, consumerism gives rise to a host of social pathologies. On the squirrel wheel of getting and spending, with the longest hours on the job in the OECD, and with both parents often at work, we Americans are neglecting the things that would truly make us better off, including personal relationships and social contact. Ed Diener and Martin Seligman, two leaders in the field of positive psychology, point out, “The quality of people’s social relationships is crucial to their well-being. People need supportive, positive relationships and social belonging to sustain well-being.”

In The Loss of Happiness in Market Democracies, sociologist Robert Lane believes Americans suffer from “a kind of famine of warm interpersonal relations, of easy-to-reach neighbors, of encircling, inclusive memberships, and of solidary family life. There is much evidence that for people lacking in social support of this kind, unemployment has more serious effects, illnesses are more deadly, disappointment with one’s children is harder to bear, bouts of depression last longer, and frustration and failed expectations of all kinds are more traumatic.”

Our families, friends, and true companionship are thus among consumerism’s principal casualties. We have channeled our desires, our insecurities, our need to demonstrate our worth and our success, our wanting to fit in and to stand out, increasingly into material things--into bigger homes, fancier cars, more appliances and gadgets, and branded apparel. But in the process, we’re slighting the precious things that no market can provide. We are hollowing out whole areas of life, of individual and social autonomy, of community, and of nature, and, if we don’t soon wake up, we will lose the chance to return, to reclaim ourselves, our neglected society, our battered world, because there will be nothing left to reclaim, nothing left to return to.

Amitai Etzioni sees the excesses of consumerism also at the roots of our current economic troubles: “The link to the economic crisis should be obvious. A culture in which the urge to consume dominates the psychology of citizens is a culture in which people will do most anything to acquire the means to consume--working slavish hours, behaving rapaciously in their business pursuits, and even bending the rules in order to maximize their earnings. They will also buy homes beyond their means and think nothing of running up credit-card debt. It therefore seems safe to say that consumerism is, as much as anything else, responsible for the current economic mess.”

Cohen also highlighted the ironies inherent in the faith that “a prospering mass consumption economy could foster democracy.” What actually happened was we witnessed “a decline in the most critical form of political participation--voting--as more commercialized political salesmanship replaced rank-and-file mobilization through parties.” She also notes, “The Consumers’ Republic’s dependence on unregulated private markets wove inequalities deep into the fabric of prosperity. . . . The deeply entrenched convictions prevailing in the Consumers’ Republic that a dynamic, private, mass consumption marketplace could float all boats and that a growing economy made reslicing the economic pie unnecessary predisposed Americans against more redistributive actions.”

The creation of the Consumers’ Republic represented the triumph of one vision of American life and purpose. But there has always been another American vision, what historian David Shi calls the tradition of “plain living and high thinking,” a tradition that began with the Puritans and the Quakers and that provides the tradition on which to build a better America for tomorrow. This tradition that sees America as a republic of virtue has always been in tension with the allure of unfettered purchasing, of America as the venue nonpareil for consumer appetites indulged shamelessly and unapologetically. In his book The Simple Life, Shi described how the concept of the simple but good life “has remained an enduring--and elusive--ideal. . . . Its primary attributes include a hostility toward luxury and a suspicion of riches, a reverence for nature and a preference for rural over urban ways of life and work, a desire for personal self-reliance through frugality and diligence, a nostalgia for the past, a commitment to conscientious rather than conspicuous consumption, a privileging of contemplation and creativity, an aesthetic preference for the plain and functional, and a sense of both religious and ecological responsibility for the just uses of the world’s resources.”

If the creation of American consumerism was a project of the country’s political and economic leaders after World War II, as Cohen concludes, it should be possible to build a counter project aimed at something better. Overcoming our bad case of national affluenza is important if America is to achieve a host of goals: reducing its ecological footprint, expanding investment in public goods, bolstering retirement security, reducing corporate power, undermining our growth fetish, expanding civic engagement, focusing resources on vast social and economic disparities at home and abroad, and improving the social and psychological well-being of individuals and families.

Etzioni properly asks what should replace the worship of consumer goods and argues that “the two most obvious candidates to fill this role are communitarian pursuits and transcendental ones.” “Communitarianism,” he writes, “refers to investing time and energy in relations with the other, including family, friends, and members of one’s community. The term also encompasses service to the common good, such as volunteering, national service, and politics. Communitarian life is not centered around altruism but around mutuality, in the sense that deeper and thicker involvement with the other is rewarding to both the recipient and the giver. . . . Transcendental pursuits refer to spiritual activities broadly understood, including religious, contemplative, and artistic ones. . . . Communitarian activities require social skills and communication skills as well as time and personal energy--but, as a rule, minimal material or financial outlays. The same holds for transcendental activities such as prayer, mediation, music, art, sports, adult education, and so on.”

Juliet Schor has also offered a path forward, one she calls “plenitude.” It has four key features: moderation in hours of work, self-provisioning, environmentally aware consumption, and restoring investments in one another and community. In sum, “work and spend less, create and connect more.”

What policy agenda would help move America beyond consumerism? First, there are attractive steps, including some described elsewhere in this book, that would help immensely: eliminating wasteful subsidies and imposing limits on virgin materials entering the economy and on emissions, toxics, and other residuals discharged to the environment; requiring full-cost, honest prices, with border tariffs to protect U.S. producers and workers from unfair foreign competition from countries not fully internalizing costs; imposing a surtax on high-end consumption spending along with various luxury taxes; promoting new for-benefit corporations and corporate transformation generally; providing high-quality public services, infrastructure, and amenities; moving to much greater social and economic equality and security; conducting educational and social marketing campaigns that not only provide accurate information to consumers but also address deeper issues such as the shortcomings of consumerism; promoting sharing, renting, and collaborative consumption instead of owning (“do more, own less, rent the rest”); attacking waste and throwaway, made-to-break culture by requiring producers to take back products at the end of their useful lives and to design products for durability, easy repair, and even instructive conversation; imposing tight regulation on “easy credit,” predatory lending; and promoting initiatives to shift cultural norms that promote consumerism.

Two additional steps are essential. First, we need to put in place a set of new policies that will eliminate overwork and lead to a shorter work-year. Just as America legislated a forty-hour workweek, we can also legislate a thirty- to thirty-two-hour (or four-day) workweek. A take-back-your-time package of initiatives should also include measures to protect part-time workers and favor work sharing; guarantee longer, paid vacations; restrict the use of overtime; and provide for generous parental and caregiving leaves, worker sabbaticals, graduated retirement, and the option of early retirement. Allied with these measures should be support needed for non-income-generating “leisure” activities (continuing education, hobbies, recreation, family and community activities, politics, volunteering, music, the arts, reading, self-improvement, and so on).

Second, we must put advertising in its place, which should be a small place. Advertising is one of the world’s most pernicious businesses. In the United States, advertising expenditures grew from $60 billion a year in 1960 to $260 billion in 2004 (in 2003 dollars), or about half of total world spending on advertising that year. In 1983, at the behest of the Reagan administration, the Federal Communications Commission deregulated advertising to children on television. One year later, the ten best-selling toys all had ties to television programs. Between 1983 and 2011, marketing aimed at children swelled from a $100 million-a-year endeavor to a $17 billion-a-year juggernaut. The average child in the United States today sees twenty thousand commercials annually. Meanwhile, ads have invaded air travel, movie theaters, video games, comic books, postseason bowl games, public schools, universities, clothing, and popular songs. And that’s not all: “Wizmark’s ‘Interactive Urinal Communicator’ plays 10-second promotional messages to the ‘ever elusive targeted male audience you are constantly aiming for.’” The Internet is the largest segment, but “out-of-home” advertising now exceeds radio, newspaper, and magazine advertising combined. Finally, there is the advent reported in the April 23, 2011, issue of The Economist of “gladvertising” and “sadvertising:” “a rather sinister-sounding idea in which billboards with embedded cameras, linked to face-tracking software, detect the mood of each consumer who passes by, and change the advertising on display to suit it.”

These folks show us no mercy, and we should return the favor. A good start would be a ban on advertising to children in grade school, as is now done in some Nordic countries and Quebec. We should also severely restrict out-of-home advertising, especially in schools. Vermont has made a strong start with its ban on highway billboards. It should be unlawful to circulate mail-order catalogues except on request. To ensure greater truthfulness and relevancy in advertising, a committee of the corporation’s directors should be required to attest to the accuracy and relevance of all claims in major ad campaigns, and accuracy and relevance should be closely policed by the appropriate federal agencies, with fines levied when appropriate. Television and radio should be required to make time available so that the public can challenge advertising pitches and commercialism generally, much as Adbusters and others now do. Finally, advertising costs should be disallowed as a business expense for tax purposes.

There is no magic bullet with which to slay consumerism, but measures like these will carry us a good distance toward that goal.

If you want to know why the middle class disappeared and where they went, look no further than your local Walmart. People walked in for the low prices, and walked out with a pile of cheap stuff, but in a figurative sense, they left their wages, jobs, and dignity on the cutting room floor of the House of Cheap.

Welcome to the logical end point of Reagonomics. Welcome to Ayan Rand’s nightmare vision of morality, where we know the price of everything but the value of nothing; where predatory behavior is celebrated and the notion of community is blasphemy.

It’s a sprint to the bottom. Lower wages; dangerous working conditions; more pollution; greater liquidation of natural capital; more global warming; less happiness. (photo: Carlos Fernandez)

In his excellent documentary, Walmart: The High Cost of Low Price, Robert Greenwald carefully documents how Walmart’s giant box stores lower wages across the entire retail sector, impose high social and economic costs on the states and communities in which they operate, and destroy local businesses.

But it’s not just Walmart. Big box stores now rule across the board in the US retail economy in everything from electronics to pet supplies. And it’s not just retail. The entire US economy is now organized around the notion that getting us cheap stuff – the more the better – is the sine qua non of economic policy.

There was a time when corporations understood that paying their employees a living wage had economic and societal benefits. Henry Ford famously said he wanted his employees to be able to afford to buy the cars they made and launched six decades of prosperity.

The labor movement helped create a social and economic compact in which workers shared the wealth they generated. When workers had enough money to consume, they stimulated economic growth. When production was as important as consumption, the economy flourished, the common worker had dignity, and the means of production were valued.

But that compact has been sacrificed at the Alter of the Cheap, and we no longer produce, we merely consume.

Our main economic activity has become the ceaseless churning and manipulating of the vast capital the old system produced. No value is added, some is skimmed off by the uber rich with each churning. It’s a colossal, self-limiting, Ponzi scheme.

The rich and the corporations have no allegiance to the US or its workers, and so they take the fruits of their skimming and either sit on it, or invest it overseas, where the cheapest goods can be made.

Job creators? Sure. But not good jobs, and not here.

When they’ve skimmed all they can from the US consumer, they’ll focus on the emerging middle class in China, India and elsewhere, leaving us to sit among the decaying detritus of cheap stuff we can no longer afford, searching in vain for the happiness we thought we were buying.

It’s a sprint to the bottom. Lower wages; dangerous working conditions; more pollution; greater liquidation of natural capital; more global warming; less happiness.

Globalization – the handmaiden of Cheap at All Costs – is celebrated as a solution, when it is the problem. And even astute economists seem unable to realize that when another country’s comparative advantage is based on environmental crimes, low pay, and inhuman conditions, then comparative advantage doesn’t operate the way it’s presented in textbooks and abstract econometric models.

Just as Walmart has driven down wages throughout the retail sector, the Doctrine of Cheap has driven down wages for the developed nations, and it will cap them at unjust levels in the developing world.

And the dirty little secret hiding behind the globalization façade is the devastating affect it is having on the environment.

For example, this week, Bejing suffered from air pollution so severe, that the airport was shut down. It’s easy to ignore this kind of environmental insult when it’s “over there.” But the carbon and soot and filth generated in China ultimately reaches us.

At the scale of human economic activity we’ve reached, we suffer the environmental consequences of our purchases no matter how cheaply or how far away they are made. In a world were humans have become a global force of nature, “there” is “here.” Climate change is exhibit A in how insults to our commons affect us all.

But the dirtiest little secret of all, is that we – the 99% -- enable this race to the bottom. Our addiction to cheap stuff and our desire for more, more, more is the fuel that feeds this destructive Ponzi scheme.

But there is good news here, too. If we are the enablers of the Walmartization of America, we have the power to change course.

How?

We are the marketplace, and we decide who wins and who loses by where we park our money, what we invest in, what we choose to buy and who we choose to buy it from.

We hold a total of $17.5 trillion in retirement funds – the single biggest source of money the big banks, Wall Street, fat cats, and assorted other speculators use to play their very own version of hi-risk Texas hold ‘em.

The real power in our economic and political system resides with us, the 99%, if we have but the wit, wisdom and courage to seize it.

John Atcheson's writing has appeared in the New York Times, the Washington Post, the Baltimore Sun, the San Jose Mercury News, the Memphis Commercial Appeal, as well as in several wonk journals. He is the author of a fictional Trilogy that centers on climate change. The first book will be available on Amazon in January. Atcheson's book reviews are featured on Climateprogress.org.

October 19, 2011

ORLANDO, Fla. — Ernest Markey lost his stone-cutting business in 2009. He then sold his home for half a million dollars less than its value at the peak of the housing bubble and moved with his wife, Marie, to a smaller home in a less affluent suburb. They gave up two new cars and bought one. Used.

The Markeys have since patched together a semblance of their old life, opening a new stone-cutting shop. But they do not expect that they will ever recover financially from the loss of equity in their old home.

“For two years I kept thinking that things would get better,” Mr. Markey, 51, said as he stood in his empty store on a recent weekday. “Now I think the future doesn’t look so good.”

The United States has a confidence problem: a nation long defined by irrational exuberance has turned gloomy about tomorrow. Consumers are holding back, businesses are suffering and the economy is barely growing.

There are good reasons for gloom — incomes have declined, many people cannot find jobs, few trust the government to make things better — but as Federal Reserve chairman, Ben S. Bernanke, noted earlier this year, those problems are not sufficient to explain the depth of the funk.

That has led a growing number of economists to argue that the collapse of housing prices, a defining feature of this downturn, is also a critical and underappreciated impediment to recovery. Americans have lost a vast amount of wealth, and they have lost faith in housing as an investment. They lack money, and they lack the confidence that they will have more money tomorrow.

Many say they believe that the bust has permanently changed their financial trajectory.

“People don’t expect their home to regain value, and that’s really led to a change in consumer attitudes about the economy that we’ve just never seen before,” said Richard Curtin, a professor of economics at the University of Michigan who directs its Survey of Consumers. The latest data from the survey, released Friday by Thomson Reuters, shows that expectations for economic growth have fallen to the lowest level since May 1980.

In Orlando, a city that trades in upbeat fantasies, the housing crash has been particularly painful. The total value of area homes has fallen below the total mortgage debt on those homes, according to the real estate analytics firm CoreLogic. In the parlance of the real estate world, Orlando is underwater, a distinction matched by Las Vegas.

“I don’t know that it’s going to get better. We just have to get used to it,” said Sherry DeWeese, whose home in Ocoee, a northwestern suburb of Orlando, is worth less than she paid for it 13 years ago — and about a third of its value at the peak of the market. “It was nothing to buy whatever we wanted. Now we just think about what we really need.”

Economists have only recently devoted serious study to how a decline in housing prices affects consumer spending, not least because this is the first decline in the average price of an American home since the Great Depression. A 2007 review of existing research by the Congressional Budget Office reported that people reduce spending by $20 to $70 a year for every $1,000 decline in the value of their home.

This “wealth effect” is significantly larger for changes in home equity than in the value of other investments, such as stocks, apparently because people regard changes in housing prices as more likely to endure.

A recent paper by Karl E. Case, an economics professor at Wellesley College, and two co-authors estimated the decline in home prices from 2005 to 2009 caused consumer spending to be $240 billion lower in 2010 than it otherwise would have been. That figure is equal to about 1.7 percent of annual economic activity, enough to be the difference between the mediocre recent growth and healthy growth. And it does not include all the other effects of the housing crash, including the low level of new home construction, that are also weighing on the economy.

Roy Pugsley, who owns a pool supply store in Winter Garden, another suburb here, said that he made 2,500 fewer sales during the first eight months of 2011 compared with the same period in 2007. That translates to one less person walking through the doors to buy chemicals or toys or spare parts in each hour that the store is open.

Mr. Pugsley said business actually increased in the early days of the recession; customers had told him they were spending more time at home. But now people buy only what they need for maintenance. “People realized that it wasn’t going to get any better, and they stopped spending on their pools, too,” he said.

At Milcarsky’s Appliance Center in the adjacent town of Longwood, business now comes from people remodeling their own homes rather than builders, and customers are picking cheaper models, said Doug Morey, a sales manager.

“People who might have bought that” — he taps a stove with chunky burners, designed to look like it belongs in a restaurant kitchen — “are double-thinking it. Everyone has had to cut back.”

That means Milcarsky’s has cut back too. The company, which employed 26 people three years ago, now has about a dozen workers, and they are making less in salary and commissions.

“I might like to think that I’m middle class, but I’m not. I’m not anymore,” said Rae-Anne Crotty, a customer service manager at the store. She now shops for groceries at discount stores, she said, and buys gifts for her children at Christmas but not on their birthdays.

It remains the prevailing view of economic policy makers that economic activity will eventually return to the same trajectory as before the recession. Mr. Bernanke and others have said that they see no evidence of any permanent change in the economy. Previous bouts of economic pessimism, as in the early 1980s and early 1990s, went away once growth picked up.

But many people in the Orlando area do not share this confidence, at least not when it comes to their own prospects. Instead, like the Markeys, they are settling into lives of less prosperity.

The couple moved to Orlando 12 years ago from central Massachusetts in search of opportunities. The business Mr. Markey created, Stone Giant, grew to include two factories and 60 employees, and it installed granite countertops in up to 15 new kitchens every day.

His new company, Winter Park Granite, now installs two kitchens on the average day. He has eight employees but cannot afford health insurance for them or himself. The family income last year was less than a third of the $175,000 that he and his wife made in 2007, their last good year.

And he sees little room for growth. He has stopped spending money on advertising.

“We’re never going to get that big again,” he said. “I was someone employing people and taking people to the good life. Now I’m just trying to survive.”

June 30, 2011

Everyone is talking about how to get the economy moving again and how to create jobs. President Obama talks about "winning the future." This means more education, more entrepreneurialism, more new industries, more new products for consumers to buy. Surely, all this new economic activity is exactly what we need or is it? Since the GDP of the US is dependent on consumers consuming to the tune of 70% of the entire economy, it stands to reason that for the economy to expand, consumers need to consume more. But wait a minute. We are already stuffed to the gills with products rammed down our throats by TV advertisers. Maybe what we need is less consumption. Americans are already experiencing an epidemic of obesity. We should be consuming less fast food. But that would bring the profits of McDonald's down. They might even have to lay off employees. Their stock might plummet. Wal-Mart offers us a plethora of cheap crap made in China. But if we stopped buying it, Wal-Mart's profits would go down, their stock price would tumble and the Dow Jones average might even find itself in bear market territory. Everyone agrees that this would be terrible for the economy. But it might be good for the citizens.

I say we need to participate less in the market economy and be more self-subsistent. This would result in a decrease in GDP, but an increase in citizen independence. The more we rely on ourselves to fulfill our needs, the less we rely on the market economy and the better off we are when that economy goes kerflooey. The recent economic meltdown was all about Wall Street and their shenanigans. It was of paramount importance to bail out Wall Street and then all good things would follow. Such was the conventional wisdom. Only good things didn't follow. People's homes were foreclosed on en masse even when banks couldn't prove that they held title to the houses. Main Street, the middle class - they were not protected at all. The culprits who caused the crisis were bailed out. The average citizen who lost his job and his house and maybe even his wife was not bailed out at all. In fact Republicans are doubling down on destroying what remains of the safety net which might have helped these unfortunates to maintain the skeleton of a half way decent way of life. Congress has continued to sponsor and uphold legislation that encourages corporations to outsource jobs. The budget is to be balanced on the backs of the poor and middle class and not by asking the rich to contribute a little more. We are rapidly retreating to the Dickensian era where to ask for a little more porridge was to be answered with a "certainly not!"

What we need is not more consumption of cheap Chinese produced crap or even newly minted crap from our own entrepreneurs. What we need is a better system of distributing the immense amount of stuff that we are already capable of producing. And in particular we are in need of a more widely distributed system of ownership so that profits redound to the average citizen and not to the upper .1% who are becoming immensely wealthy far beyond their needs while the poor and middle class are being reduced to penury and poverty. What we need is a government that looks out for the little guy, not one who is all for the competitive struggle to produce more and more goods and win the future that way. How about winning the future by taking back our ability to be self-sustaining? We need to return to an era when people produced a large amount of their own food by growing it themselves instead of relying on the marketplace of consumer provided food by large agricorporations which use pesticides, herbicides and hormones to provide us with food which in most cases will not kill us right away. That will take place in 30-40 years when cancer sets in. But in a lot of cases of e coli and salmonella brought on by filthy conditions for animals in factory farms, it will kill us or sicken us immediately. So profits are concentrated in the hands of a few corporations instead of being widely distributed which would take place if there were widespread family gardening which also produces healthier foods. If everyone farmed to some extent, we would all be better off but GDP and corporate profits would decline because we wouldn't be participating to such a great extent in the market economy.

Sociologists decry the fact that in many parts of the world people are living on $2. a day. But those in this category that are rural may in fact be 98% self-subsistent. In other words they are providing for their own needs without participating in the market economy or are only participating to the tune of $2. a day. On the other hand the urban poor who are living on $2. a day may not be in a position to be self-subsistent, and they are truly poor because they have to meet all their needs by means of the market economy and $2. a day doesn't go very far. Just recently many Americans met probably 75% of their needs without participating in the market economy. Take my grandparents, for example. My Grandfather lived and worked on a small dairy farm. They had chickens and hogs and a large garden. So they provided perhaps 90% or more of their own food instead of buying it at the market. They sold milk into the marketplace in exchange for dollars which they used to purchase what they could not provide for themselves. Instead of buying oil or gas, my grandfather farmed with horses and he grew the fuel that they consumed with the result that he did his own energy production and did not have to depend on Exxon Mobil or Chevron for energy. And as a bonus horses did not pollute. Since chemicals were not available, his farming was organic by default. He learned carpentry and built his own buildings with the result he didn't have to hire a contractor. They were largely self-sufficient and self-subsistent. Of course, they made their own clothes instead of buying them in a store. Women had a whole variety of functions within the household instead of vying for jobs in the marketplace, another way in which they were self-sufficient. They actually weathered the Great Depression quite well since they weren't dependent on the market economy. Even my parents who had government jobs as teachers, the kind that Republicans are attacking today, raised chickens and had a really large garden from which they provided much of their own food. And women used to bake instead of buying prepared foods.

So maybe the answer to the economic malaise that we find ourselves in today will be solved not by creating new industries to manufacture more and better stuff but by figuring out ways to be less dependent on the marketplace and more self-sufficient. Profit centers need to be more widely dispersed instead of profits ending up in the hands of the Fortune 400. Think about it: when you participate in the market economy, the money you spend ends up in the hands of a very few and select group of corporations and wealthy individuals and families. These individuals, families and corporations have effectively captured government through their paid lobbyists so that government operates solely in their interests. Jefferson envisioned a country of independent yeoman, small farmers and craftsmen. In today's America, there are hardly any such people. Instead most rely on a job to provide them with income which they use to provide for all their needs by purchasing goods and services in the marketplace. As more and more people lose their jobs because the jobs are outsourced or are replaced by automated machines, there is no place to go but down. But the self-employed, the self-sufficient and self-subsistent will be able to provide for themselves and their families irregardless of what is happening in the marketplace. Those absolutely dependent on wages to make a living are already becoming neo-serfs needing two or three minimum wage jobs to make a go of it. The worst off are dependent on charity.

February 04, 2011

Wal-Mart needed only 8 weeks and maybe thirty thousand dollars to scare the daylights out of the City Council in San Diego. One local official in San Diego, California called it a "dark day for democracy."

In December of 2010, the City Council voted to override a veto by the Mayor of a zoning ordinance that requires certain big box stores over 90,000 square feet to study their impact on the local economy, on wages, and on traffic. It was a watered down ordinance at best -- but there was one "citizen" who didn't appreciate the City Council vote. Wal-Mart began portraying the ordinance as an outright ban on superstores, and the corporation hired professional signature collectors to put the issue on the San Diego ballot. Wal-Mart knew that San Diego could not financially afford to hold a referendum, so all the folks in Bentonville had to do was throw a head fake. It worked.

Cash-strapped San Diego would have to swallow hard to come up with the $3.4 million cost of a referendum. Wal-Mart put the City Council neatly in a box. The City Council voted 7-1 to rescind the ordinance -- not because they had a change of heart -- but because fighting Wal-Mart was not worth millions of dollars to the Council.

For several years, anti-big box residents have been trying to keep huge stores out of San Diego. In November of 2006, the City Council took an initial vote to ban retail stores of more than 90,000 square feet that use 10% of their interior space to sell groceries or other merchandise that is not subject to sales tax. This ordinance was modeled on similar ordinances in California -- most notably Turlock -- where Wal-Mart failed repeatedly to challenge the law in the courts.

Predictably, Wal-Mart threatened a voter referendum on the big box ban in San Diego. The Mayor of San Diego, Jerry Sanders, told reporters at the time that he would veto the new cap if it went through its required second vote. In early June, 2007, the Council took its final vote to pass the new ordinance. Mayor Sanders vetoed it, and Wal-Mart threatened that it would hire people to gather signatures to put the measure on the ballot in the form of a referendum.

Wal-Mart's threat was enough. One Councilor switched her vote for the ban, to against the ban. The San Diego Union-Tribune called this change of heart a "surprise twist." The vote on the override was a 4-4 tie, so the Mayor's veto killed the big box ordinance. The head of the San Diego Neighborhood Market Association, which represents 2,000 small businesses in the city, said her group was disappointed by the Council's decision to reverse their vote.

But City Councilors did not give up. They came back with a diluted ordinance that simply required large stores to conduct impact studies before being permitted. They said they wanted to "put something in place that also protects small businesses by doing an economic impact report and allowing the communities to have a greater oversight of that process."

Repeating history, Mayor Jerry Sanders vetoed the milder economic impact legislation at the end of November, 2010. "I do not believe it is the City's role to determine where consumers may shop or to provide a competitive advantage to certain retail businesses," Sanders said in his veto message.

Councilor Todd Gloria, who was the lead sponsor of the economic impact ordinance, needed to round up five votes for the measure. This time around, the City Council voted to override Mayor Sanders, and the new ordinance was on the books. But well before the override vote, Wal-Mart began its menacing behavior. The retailer took out full page ads in the Union-Tribune saying the City Council was just carrying water for the unions, and urging San Diego voters to "be a voice for choice."

By mid-December Wal-Mart had launched what the newspaper called "a furious campaign" to gather at least 31,000 signatures to overturn the ordinance. The Arkansas-based corporation hired private firms to gather signatures for them as shoppers left other Wal-Mart stores in the area. Their professional gatherers amassed 54,000 signatures in no time.

Because there were no elections slated in 2011, the city would have to hold a special election, and taxpayers would pick up as much as $3.4 million for Wal-Mart's vote. Wal-Mart's opponents called on the company to pay for the referendum -- since it was the company which stood to gain hundreds of millions in new sales if the big box law was overturned. But the chances of having Wal-Mart foot the bill were as dim as finding Sam Walton selling moon pies in aisle 12.

This week, the City Council once again caved to Wal-Mart. The vote to repeal their November ordinance was 7-1. City Council President Tony Young pointed out all the better uses the city could find for $3 million. "It's been a really tough fight," he told the Associated Press, "but we also have to keep in mind that we do have a fiduciary responsibility to the city of San Diego."

After the vote, Wal-Mart was puffed up like someone who had just won a big pot at Texas Hold'em -- with nothing in the hole. "Thanks to this vote," a company spokesperson said, "we will be able to provide the people of San Diego with improved access to affordable and fresh food, particularly for those living in underserved neighborhoods."

The lone holdout was City Councilor Marti Emerald, who told her constituents, "My vote is not for sale." And Councilor Todd Gloria, who had championed the watered-down ordinance, could only mutter: "Let's be clear, this is a dark day for democracy."

Wal-Mart has fought similar ordinances across the country, arguing that local officials have no right to limit the "freedom to shop," as if this was enshrined in the Bill of Rights somewhere. The company's attempts to challenge such laws in the courts have all failed, so buying elections is the next best option--and less costly. With corporate free speech a bottomless well, fighting Wal-Mart is like going up against a candidate with a massive campaign war chest. Wal-Mart's attitude is that they are too big to fail.

For now, San Diego has been bought and sold by a large corporation. But the day after the vote, a State Senator from San Diego, Juan Vargas, vowed to submit legislation in Sacramento that would accomplish the same goal as the short-lived San Diego law.

"What I did not like," the Senator told the Union-Tribune, "was that one company and one company alone had the power to scare the City Council into changing its mind and that is what happened. That's not right. That's not the way government should work. One company should not have the power to do that."

When Wal-Mart learned of Vargas' initiative, the company told the media that state lawmakers should focus on solving "the state budget woes" instead of "trying to thwart the will of the people." But Wal-Mart should keep its corporate money out of politics, and go back to selling cheap underwear. Cities and towns have the right to limit the scale of large projects, as a way to mitigate adverse impacts on local businesses, traffic, and property values. It's a fundamental local control power.

To "Citizen" Wal-Mart, everything is for sale -- including public policy. If the company doesn't like your local laws, it will lay out some cash to change them. The large retailer's intrusion into local, state and national politics has indeed brought 'dark days' to our democracy.

Al Norman is the founder of Sprawl-Busters, and author of "The Case Against Wal-Mart," and "Slam-Dunking Wal-Mart." His website, http://www.sprawl-busters.com, can also be found on Facebook.

January 22, 2011

President Obama is waxing ebullient on the jobs front. He's partnered up with GE CEO Jeffrey Immelt, and they are both proclaiming that the US will again be a robust manufacturing and exporting nation. They have rejected the model for the US as a mainly consuming and service oriented nation. That's all to the good. But Obama seems to have placed too much faith in the corporate CEOs. He seems to think they're going to stop outsourcing, and, out of the goodness of their hearts, they're going to start creating jobs here at home. But the official US government still has in place laws and policies - and in particular tax policies - that actually encourage outsourcing. Nancy Pelosi, when the Democrats controlled the House, said after passing a bill which would have reined in outsourcing: "In this legislation, which is job creating, it closes the loophole which has allowed businesses to ship jobs overseas. Can you believe that we have a tax policy that enables outsourcing? So if you have one thing to say about this bill to your constituents, you can say that today, you voted to close the loophole to ship U.S. jobs overseas and giving businesses a tax break to do so. It is not right. It will be corrected today.” This was in May, 2010. Of course, this bill never made it into law because it was filibustered by Republicans in the Senate. Sorry, Nancy.

Closing the loophole that has allowed businesses to ship jobs overseas? Well, sorry to say that loophole was never closed! President Obama though wants us to believe that, regardless of that loophole being closed, CEOs like Jeffrey Immelt are going to be nice guys and create local manufacturing jobs here in the US even though it is going to lower their profit margins, even though the loopholes for shipping jobs overseas are still open! Is he being naive? And then there is this from Robert Reich:

General Electric and other companies are signing up for deals with China involving energy and aviation manufacturing. But much of this will be done in China. GE’s joint venture with Aviation Industries of China, to develop new integrated avionics systems (which presumably will find their way into Boeing planes) will be based in Shanghai.

Will the real GE please stand up? Corporations are required by law to maximize their profits. This means that they will lower their expenses by getting the cheapest labor wherever they can get it. And American labor is relatively expensive compared to Chinese labor. So Obama is skating on thin ice. His bravado overlooks the underpinnings of law that give American corporations huge incentives for creating jobs overseas and outsourcing American jobs. Sure, GE wants to sell to the Chinese. But this doesn't mean that those products will be exported from the US. In the last ten years 42,000 American factories have closed. Millions of jobs have been lost. And now Mr. Nice Guy, Jeffrey Immelt of GE, is going to forego maximizing profits and his salary and his duty to shareholders in order to do a favor for President Obama and create some jobs in the US? What game is he playing? Mr. President, where are the legal underpinnings that would make sure that this will happen? You have a Congress that won't even close loopholes that would encourage job creation in the US. Do you have the feeling you're teetering on the brink? You said you've moved us back from the abyss. But have you? The abyss still looms because now for sure with a Republican controlled House, no loopholes that encourage and enable outsourcing will ever be closed unless and until Democrats control both Houses and the filibuster rules have been changed. Mr. President, you are whistling Dixie, in the dark, and past the graveyard too!

BEIJING — Aided by at least $43 million in assistance from the government of Massachusetts and an innovative solar energy technology, Evergreen Solar emerged in the last three years as the third-largest maker of solar panels in the United States.

But now the company is closing its main American factory, laying off the 800 workers by the end of March and shifting production to a joint venture with a Chinese company in central China. Evergreen cited the much higher government support available in China.

It looks like the right hand doesn't know what the left hand's doing. It seems like not only does China have cheaper labor, but they have more government support for American companies that want to build plants and create jobs there! The US on the other hand has no industrial policy, no set of incentives in order to have companies, domestic or foreign, build more plants in the US. And there are no unions to speak of that would fight for the rights of American workers. America, for all intents and purposes, has been deunionized starting with Reagan's firing of the air traffic controllers which effectively put their PATCO union out of business.

The United States is rapidly becoming the very first "post-industrial" nation on the globe. All great economic empires eventually become fat and lazy and squander the great wealth that their forefathers have left them, but the pace at which America is accomplishing this is absolutely amazing. It was America that was at the forefront of the industrial revolution.

It was America that showed the world how to mass produce everything from automobiles to televisions to airplanes. It was the great American manufacturing base that crushed Germany and Japan in World War II. But now we are witnessing the deindustrialization of America. Tens of thousands of factories have left the United States in the past decade alone. Millions upon millions of manufacturing jobs have been lost in the same time period.The United States has become a nation that consumes everything in sight and yet produces increasingly little. Do you know what our biggest export is today?

Waste paper. Yes, trash is the number one thing that we ship out to the rest of the world as we voraciously blow our money on whatever the rest of the world wants to sell to us. The United States has become bloated and spoiled, and our economy is now just a shadow of what it once was. Once upon a time America could literally outproduce the rest of the world combined. Today that is no longer true, but Americans sure do consume more than anyone else in the world. If the deindustrialization of America continues at this current pace, what possible kind of a future are we going to be leaving to our children?

The US is embarked on its own destruction thanks to the "small government" mantra of the Republican controlled Congress. Small government means no industrial policy except by lobbyists seeking special favors for their particular corporate sponsors. It means that US government policy will favor US business but not necessarily US workers. Unless and until the US can adopt policies which favor job creation in the US, US workers will be left out in the cold. And President Obama's soaring rhetoric about cooperation with CEOs like Jeffrey Immelt will be just that: rhetoric.

Books

Doug Ramsey: Take Five: The Public and Private Lives of Paul DesmondThis is a great book! Paul Desmond and Dave Brubeck formed the heart of one of the best all time jazz groups. Paul was the quintessential intellectual, white jazz musician. A talented writer, he never published anything. However author, Doug Ramsey has collected Paul's letters here. How ironic that now his writing in the form of letters to his father and ex-wife, among others, is finally published showing another window on the mind of this talented person.
A sideman, for the most part, his entire life, the Dave Brubeck Quartet might never have happened at all due to the fact that Paul had managed to offend Dave to the point where he never wanted to see him again. It had to do with a gig that Paul actually was the leader of. Paul wanted to take the summer off to play another gig, and Dave wanted Paul to let him take over the gig at the Band Box in Palo Alto, CA. Paul wouldn't let him and Dave, married with two children, proceeded to starve.
Due to an elaborate publicity campaign, when he realized the error of his ways, Paul managed to worm himself back into Dave's good graces. The rest is history.
This book is remarkable for the insight it gives into a working jazz musician's mind, wonderful pictures and interviews with the significant figures in Paul's life. Author Ramsey, not a remarkable penman himself, has nevertheless done a magnificent job of assembling all these various materials. Unlike a lot of jazz authors, he doesn't overly idolize his subject with the result that you get the feeling that you have met a real person and not a idealized version. That's high praise indeed for any biographer. (*****)